Weak UK industrial production points to Q2 GDP growth of 0.3%

Weak UK industrial production points to Q2 GDP growth of 0.3%

Weak UK industrial production points to Q2 GDP growth of 0.3%

In addition, the Bank of England's chief economist, Andy Haldane, said last week it needed to "look seriously" at the possibility of raising interest rates to counter the recent pick-up in inflation, BBC said. In March, Prime Minister Theresa May triggered the two-year Brexit process but discussions only began in June after a general election in which her Conservative Party lost its majority in parliament.

Economists said the Office for National Statistics data suggested second-quarter GDP growth will struggle to improve much on the 0.2 per cent achieved in the first three months of the year, which was down from 0.7 the previous quarter.

Moreover, the warmest May for nine years saw gas supplies drop 1.5 per cent on the month, as demand for heating took a tumble, pushing industrial production lower.

However, reacting to the latest economic figures, Peter Dixon, an economist at Commerzbank, said: "It's all building up a pattern here that says the economy is clearly losing momentum".

Howard Archer, chief economic advisor to the EY ITEM Club, said it was "virtually certain" that construction and manufacturing dragged down economic growth in the second quarter. Output in the construction sector dropped 1.2% in the three months to May.

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The manufacturing figures were hit by a 4.4 per cent drop on the month in motor vehicle production, the biggest fall since February a year ago and matching industry figures showing a fall in new auto registrations.

"Instead of a cliff edge, the United Kingdom needs a bridge to the new European Union deal", said Carolyn Fairbairn, director-general of the Confederation of British Industry.

Broader industrial output fell 0.1 percent in May after a 0.2 percent rise in April.

The goods trade deficit increased to 11.863 billion pounds ($15.33 billion) in May from 10.595 billion pounds in April, the ONS said, wider than all forecasts in the Reuters poll. The deficit including trade-in services widened by £1bn to £3.1bn in May, despite a pick-up in export volumes. However, business surveys have cast doubt about whether an improvement will be seen in the months ahead.

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